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Non-Tech : Auric Goldfinger's Short List
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To: rupers who wrote (8483)12/11/2001 10:09:47 AM
From: Sir Auric Goldfinger  Read Replies (1) of 19428
 
PacifiCare Shares Fall After Merrill Lynch Downgrades Stock

Santa Ana, California, Dec. 11 (Bloomberg) -- Shares of
PacifiCare Health Systems Inc., the biggest operator of Medicare
health plans, fell as much as 14 percent after a Merrill Lynch
analyst cut her rating on the stock.
PacifiCare fell $2.25 to $13.90 in trading before U.S.
markets opened. The shares fell 11 percent yesterday after the
company agreed to sell up to $150 million in stock to reduce its
bank debt.
The stock was cut to ``reduce/sell'' from ``neutral'' by
Merrill Lynch analyst Roberta Goodman. The company said it will
sell as many as 6.9 million shares to Acqua Wellington North
American Equities Fund Ltd. over 18 months. PacifiCare must cut
its bank debt by March 31 to avoid paying a higher interest rate
under the terms of the loans, according to Credit Suisse First
Boston Inc. analyst Joseph France.
PacifiCare refinanced almost $800 million in bank debt last
year after failing to raise $1 billion in debt through a
combination of junk bonds and loans. Most of the debt is due in
January 2003, though the Santa Ana, California-based company has
to cut $250 million in debt or pay 1 percentage point more in
interest, France said.
The health insurer has struggled to control medical costs
that rose after it renegotiated contracts in California to pay
doctors and hospitals for the actual cost of care rather than
fixed monthly fees per patient. Costs also have risen for patients
covered by Medicare, the government health-insurance program for
the elderly and disabled.

--Keith Snider in the Washington newsroom at (202) 624-1982 or
ksnider1@bloomberg.net / mfr

Story illustration: To compare PacifiCare's share performance to
competitors, see {PHSY US <Equity> RV <GO>}.

Company news:
PHSY US <Equity> CN
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